With the fallout from the ongoing EU anti-dumping investigation into Chinese photovoltaic products continuing with yesterday’s Chinese criticism of FIT subsidies in European member states, the union has muddied the waters further with the latest plans for its Generalized Scheme of Preferences (GSP). Meanwhile, a spokesman has commented on the recently filed anti-dumping polysilicon investigation launched by China.

The EU has responded to the recently instigated investigation into European polysilicon imports to China.

Flickr/Stuart Chalmers

The GSP replaced the General Agreement on Tariffs and Trade (GATT) and is a mechanism used by the EU to allow for reduced or zero tariff rates on goods coming into Europe, in order to aid the world’s neediest nations by offering an EU market for their goods. So far, so good.

Details of changes to the GSP – which will take effect from January 1, 2014 – reveal that although the number of countries benefiting will be reduced to 89, it will still include China among the countries designated "lower and lower middle income" partners and, thus, benefitting from either the removal or lowering of duties on specified goods.

In a further development, the list of goods which Chinese companies can export to the EU under preferential tariff conditions has been expanded to include items that can be used in solar products: alkali and alkaline-earth metals (other than sodium and cadmium); aluminum oxide (excluding artificial corundum); ammonium sulphate; sodium nitrate; unwrought lead, other than refined; and unwrought cadmium powders.

EU spokesman John Clancy told pv magazine with respect to the apparent conflict with the anti-dumping investigation, "The two issues are entirely separate. Trade defence actions are a legal process under the WTO framework."

He added, "China has a massive rural and poor population beyond the industrial centres. Many of the product lines which previously had preferences have 'graduated', or left the scheme, but some still remain as China is classified by the international community as a middle income nation because of its per capita income.

"Our aim in reforming GSP was to adjust the system to better reflect the recent changes of its – and other countries’ – economies. The aim is also to provide – as a result of this update to the system – more opportunity for the poorest nations to benefit from the preferential scheme."

In the latest twist to the EU-China solar trade dispute – which began this September – China has told the World Trade Organization (WTO) that FIT schemes in Italy, Greece and other EU member states include domestic content restrictions and are inconsistent with the GATT 1994, the Agreement on Subsidies and Countervailing Measures and the Agreement on Trade-Related Investment Measures.

"The Commission is examining carefully the subsidy allegations put forward in the complaint. We will fully cooperate with the Chinese authorities in this proceeding to defend our rights, in close coordination with the other relevant authorities in charge of the alleged subsidy programmes, including the German authorities and the European Investment Bank," said Clancy.

He concluded, "At the same time, we hope that the Chinese Ministry of Commerce will fully comply with the international trade rules laid down in the WTO Agreement on Subsidies and Countervailing Measures in this proceeding."

Regarding the U.S.-China trade dispute, the International Trade Commission is set to make its final determination tomorrow, November 7.